Analyzing Adam Smith’s theory in the graph

 Analyzing Adam Smith’s theory in the graph:

            According to Adam Smith’s theory labor cost / resource cost is considered. And it can be analyzed through the following graph:

In the above figure the horizontal line represents product X and the vertical line represents product Y. A A^́   is the production possibility of country A. And BB is the production possibility of country B. If country A uses its resources in producing product X then its production will be OA (10units) and if it produces product Y then production will be OA (5units).